Are you worried about foreclosure? Having trouble keeping up with your mortgage payments? Possibly even owe more than your home is worth? Has your income gone down or your mortgage payments gone up?
Homeowners who are struggling to keep up with mortgage payments may find help through the 2009 Making Home Affordable Program (MHAP). This program is designed to help stabilize the housing market and help eligible homeowners. There are alternatives that homeowners should investigate. A word to the wise.... Beware of scams - of those who would take advantage of you, pressure you and try to make money off your difficult situation.
One alternative is the Home Affordable Modification Program (HAMP), designed to make mortgage payments more affordable for eligible homeowners. This program can help homeowners avoid foreclosure and the associated drop in their credit scores. Read more at www.makinghomesaffordable.gov.
Another alternative is the Home Affordable Foreclosure Alternatives program (HAFA) which is designed to streamline short sales and provide a uniform process and standard forms. It also provides incentives to families and to their mortgage servicers. Eligible homeowners who sell their homes under HAFA can qualify for $3,000 to help cover moving costs to another home.
You may ask, "What is a short sale?" A short sale is an alternative for homeowners who cannot qualify to stay in their homes through loan modification. The servicer (represents the lender) allows the homeowner to list and sell their mortgaged property even when the net proceeds are less than the total amount due on the loan. With plummeting home values in many locations, this can be a time-consuming but more palatable alternative than foreclosure.
Please note, this is not hassle-free. However, if approved and successful in the short sale, a homeowner can get out of a difficult mortgage and maintain a more desirable credit profile than with foreclosure. Be warned that your credit score will still take a significant hit with a short sale. There are a lot of hoops to jump through, but the potential for a $3,000 incentive and less severe credit score repercusions can make the effort worthwhile. Homeowners who go through a short sale can become homeowners again perhaps in two years as opposed to the three or more after a foreclosure.
States may differ, and types of mortgages affect the approval process. Carefully consider your alternatives. You may have equity in your home and just need a break with a lower payment through a loan modification program. Or you may be struggling so much that you have missed payments and face foreclosure unless you can work with your lender. Alternatives to foreclosure are not easy. There are requirements that must be met, but you might be able to avoid foreclosure.
You will find a number of resources and links at financialstability.gov. Consult a tax professional and/or attorney for the particulars regarding your own situation. Deliberate youro alternatives carefully, and do not be drawn into scams.
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